United States v. Charles Emor

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 9, 2014 May 5, 2015

No. 13-3071

UNITED STATES OF AMERICA,

APPELLEE

v.

CHARLES IKE EMOR, ALSO KNOWN AS CHARLES IKE

EMENOGHA, ALSO KNOWN AS CHARLES IKESON,

APPELLEE

SUNRISE ACADEMY,

APPELLANT

Appeal from the United States District Court

for the District of Columbia

(No. 1:10-cr-00298-1)

John D. Quinn argued the cause for appellant. With him

on the briefs were Stephen Sale and David B. Smith.

Zia M. Faruqui, Assistant U.S. Attorney, argued the

cause for appellee. With him on the brief were Ronald C.

Machen Jr., U.S. Attorney, and Elizabeth Trosman, John P.

Mannarino, and Diane G. Lucas, Assistant U.S. Attorneys.

Elizabeth H. Danello, Assistant U.S. Attorney, entered an

appearance.

2

Before: BROWN, MILLETT and WILKINS, Circuit Judges.

Opinion for the Court filed by Circuit Judge BROWN.

Concurring opinion filed by Circuit Judge WILKINS.

BROWN, Circuit Judge. In an episode of the iconic 1990s

television show Friends, Joey Tribbiani tries to dissuade

Rachel Green from moving to Paris. Joey asks Rachel to flip a

coin. If he wins the coin flip, she must agree to stay. Rachel

flips the coin; Joey loses. When later recounting the story to

Ross Gellar, a befuddled Joey says, “[w]ho loses fifty-seven

coin tosses in a row?” Friends: The One with Rachel’s Going

Away Party (NBC television broadcast Apr. 29, 2004). Before

Ross can answer, Joey explains Rachel’s rules: “Heads, she

wins; tails, I lose.” Id.

The proceedings in this case have largely followed the

same rules. SunRise Academy (“SunRise”) claimed the

federal government seized property from criminal defendant

Charles Emor belonging to SunRise. But the government

succeeded in excluding SunRise from Emor’s criminal

proceedings, suggesting SunRise could press its claims to the

property in a third-party forfeiture proceeding. When SunRise

later did so, the government filed a motion to dismiss the

petition, contending that SunRise should be denied a hearing

based on findings the court made in the prior proceeding from

which SunRise was excluded. Because this heads the

government wins and tails SunRise loses form of criminal

forfeiture does not comport with the statutory scheme, we

reverse.

3

I

A

SunRise was founded in 1999 by Charles Emor as a

private nonprofit school serving special needs children in the

District of Columbia. SunRise was governed by a Board of

Directors, which, at various times, consisted of SunRise’s

principal, teachers, employees, and Emor’s family members.

Emor was the one constant on SunRise’s Board.

SunRise was no small operation. It built a solid financial

endowment, possessed two campuses, educated over 150

students each semester, and employed a number of teachers,

therapists, and counselors. In July 2007, SunRise filed a

successful application for a Certificate of Approval with the

District of Columbia to provide educational services to special

needs students. Students paid no tuition to attend SunRise;

instead, the District reimbursed SunRise for educating the

students. That reimbursement often totaled over $400,000 a

month.

In April 2009, the District of Columbia Public Schools

(“DCPS”) decided to investigate whether SunRise had fully

implemented DCPS’s policies. More than a year later, the

Office of State Superintendent of Education (“OSSE”) issued

a report and revoked SunRise’s Certificate, after finding

SunRise had failed to keep accurate daily attendance records,

fully report absenteeism, and had fabricated student records to

receive payment from the District for services not actually

rendered. But OSSE did not revoke SunRise’s Certificate due

to the quality of education provided by SunRise.

4

B

Meanwhile, from January 2006 through November 2010,

Emor used his authority as a SunRise Director and Board

Member to withdraw funds from SunRise’s bank accounts.

He then used those funds to, inter alia, purchase luxury items

for himself, provide money to his family members, and pay

the rent on his townhouse.

Emor’s most brazen fraud involved convincing

SunRise’s Board to invest in a for-profit company called Core

Ventures. According to the proposal, Core would build a

coffee shop or vocational school on SunRise property. The

business would provide training for SunRise students and

profits would be returned to SunRise.

Beginning in March 2009, Jamila Negatu, a SunRise

Board Member and employee, made a series of wire transfers

totaling over two million dollars to Core. Emor directed

Negatu to transfer the money, even though SunRise possessed

no loan documentation binding Core to repay the money,

reinvest the profits, or explaining the consequence of default.

The only documentation regarding the money transfers were

minutes from two SunRise Board meetings and financial

documents prepared for SunRise by its accountant

characterizing the transfers as loans.

The money wired to Core was never returned to SunRise.

Nor did Core pursue its plans for building a coffee shop or a

vocational school. Core, however, did purchase and pay the

insurance on a Lexus SUV that Emor drove.

5

C

The federal government eventually caught Emor,

arresting him, and seizing the Lexus SUV and the over two

million dollars in Core’s bank account. The government

charged Emor with thirty-seven counts, including mail and

wire fraud, and various other federal and D.C. Code

violations. The government also provided notice it was

seeking forfeiture of Core’s property.

The government had trouble identifying the alleged

victim of Emor’s fraud. In some counts, the government

alleged Emor, through SunRise, devised a scheme to defraud

and to obtain public money from the District, for his own use

and benefit. Consistent with a scheme to defraud the District,

the government charged Emor with ten counts of mail fraud

and five counts of wire fraud, with each count involving the

District reimbursing SunRise for educational services. The

district court ultimately dismissed these counts of the

indictment with prejudice over the government’s objections.

But the government also described Emor’s scheme as one

to defraud SunRise, alleging Emor created a set of bogus

SunRise Board of Director resolutions purportedly

authorizing SunRise to lend over two million dollars to Core

for the purposes of operating a coffee shop, when the “terms

of the loan w[ere] never reduced to writing.” J.A. 50. And the

government charged Emor with several wire fraud counts

involving each wire transfer from SunRise to Core.

SunRise was never charged with wrongdoing by the

government. In fact, SunRise filed a motion under Federal

Rule of Criminal Procedure 41 for the return of its property,

claiming that it owned the two million dollars and the Lexus.

The district court denied that request, holding that 21 U.S.C.

6

§ 853(k) prohibits third parties from intervening in criminal

proceedings, other than a third party proceeding under 21

U.S.C. § 853(n). Sunrise Acad. v. United States, 791 F. Supp.

2d 200, 204 (D.D.C. 2011).

Emor ultimately negotiated a sweetheart deal with the

government, which agreed to drop every count save one in

exchange for Emor’s guilty plea. The Statement of the

Offense, included as part of Emor’s plea agreement to one

count of wire fraud, alleged that Emor devised a scheme to

obtain money “from SunRise’s bank accounts.” J.A. 71. As a

part of the scheme, Emor committed “various

misrepresentations and omissions of material facts,” and

“used the money obtained from SunRise’s bank accounts in a

manner unrelated to the education of students with disabilities

at SunRise.” Id. But the prosecutors consciously and

deliberately declined to identify the victim of Emor’s fraud,

and the district court deferred a determination of the fraud

victim’s identity until the preliminary forfeiture hearing.

D

SunRise could not participate at the preliminary forfeiture

hearing, although two board members and several employees

were called to testify as part of the government’s case. The

court made a number of findings at the hearing, of which

three are relevant to this appeal. First, the court found

SunRise did not own Core. Second, the court held SunRise

was Emor’s alter ego. Third, the court found, for restitution

purposes, that SunRise was not a victim of Emor’s fraud. The

court entered a preliminary order forfeiting the funds in

Core’s bank accounts and the Lexus SUV to the federal

government.

7

SunRise then filed a third-party petition claiming

ownership in the forfeited property and requesting a hearing

to determine its interest. SunRise claimed it was a secured

lender to Core; the owner of the forfeited property; the

assignee of all interest in the forfeited property from Core; the

beneficiary of a constructive trust; and the victim of Emor’s

fraud.

The government moved to dismiss SunRise’s petition for

lack of standing, and the district court granted the motion.

United States v. Emor¸ 2013 WL 3005366 (D.D.C. June 18,

2013). The court found SunRise had failed to assert facts

showing it possessed a secured interest in the seized funds.

Moreover, SunRise’s bare assertion it owned Core was

insufficient in light of the court’s previous finding at the

preliminary forfeiture hearing that Emor, alone, owned Core.

The court also rejected SunRise’s claim of assignment

from Core. The court found Core was Emor’s nominee (hence

Core and Emor were the same), and only someone “other

than” the defendant could petition for a third-party

proceeding. J.A. 313. Based on a finding it made during the

preliminary forfeiture hearing, the court held SunRise lacked

standing because it was an alter ego of Emor—a finding it

found “no reason to revisit.” J.A. 323. The court further

declined SunRise’s constructive trust argument, noting that

this Court does not allow the constructive trust theory of

standing in forfeiture cases. See United States v. BCCI

Holdings (Luxemborg), S.A., 46 F.3d 1185 (D.C. Cir. 1995).

Lastly, the court concluded SunRise was not entitled to the

forfeited funds as a victim of fraud because merely being a

fraud victim does not confer an interest in property necessary

to meet the standing requirements.

8

II

SunRise claims it possessed the standing necessary to

obtain a third-party ancillary hearing under several legal

theories. Before addressing those theories, a discussion of

criminal forfeiture procedures is necessary.

A

Under 28 U.S.C. § 2461(c), “criminal forfeiture is

available for general . . . wire fraud violations.” United States

v. Day, 524 F.3d 1361, 1376 (D.C. Cir. 2008). The procedures

set forth in 21 U.S.C. § 853—minus subsection (d)—apply

“to all stages of a criminal forfeiture proceeding.” 28 U.S.C.

2461(c).

At the preliminary order of forfeiture stage, “[i]f the

government seeks forfeiture of specific property, the court

must determine whether the government has established the

requisite nexus between the property and the offense.” FED. R.

CRIM. P. 32.2(b)(1)(A). The court is required to make its

determination “without regard to any third party’s interest in

the property.” FED. R. CRIM. P. 32.2(b)(2)(A). Indeed, no third

party may “intervene” in the criminal forfeiture proceeding.

21 U.S.C. § 853(k)(1).

The sole forum for a third party to address its interest in

forfeited property is through a third party ancillary

proceeding. See id. § 853(n). Any third party, “other than the

defendant,” may petition for an ancillary proceeding if it can

assert a “legal interest” in the forfeited property. Id. §

853(n)(2). The third party must file a petition setting forth the

“nature and extent” of its interest in the property, the “time

and circumstances” when petitioner acquired that interest, any

supporting facts, and the requested relief. Id. § 853(n)(3).

9

After receiving a petition, a court may, upon motion,

“dismiss the petition for lack of standing” or for “failure to

state a claim.” FED. R. CRIM. P. 32.2(c)(1)(A). For purposes

of deciding any motion to dismiss, “the facts set forth in the

petition are assumed to be true.” Id.

In an appeal from a criminal forfeiture proceeding, we

review the district court’s fact finding for clear error, see

United States v. Oregon, 671 F.3d 484, 490 (4th Cir. 2012),

and the district court’s legal interpretations de novo, see Day,

524 F.3d at 1367.

B

As a threshold matter, we must determine whether

SunRise has standing under Article III of the Constitution. See

Lujan v. Defenders of Wildlife, 504 U.S. 555, 559–60 (1992).

“[T]he requirements for a [petitioner] to demonstrate

constitutional standing [to challenge a forfeiture] are very

forgiving.” United States v. One-Sixth Share of James J.

Bulger in All Present And Future Proceeds of Mass Millions

Lottery Ticket No. M246233, 326 F.3d 36, 41 (1st Cir. 2003).

While some courts have focused on whether a party had an

ownership or possessory interest under state law at the time of

forfeiture, see, e.g., United States v. Timley, 507, F.3d 1125,

1129 (8th Cir. 2007), other courts have noted “it is the injury

to the party seeking standing that remains the ultimate focus,”

United States v. Cambio Exacto, S.A., 166 F.3d 522, 527 (2d

Cir. 1999). In general, any colorable claim on the property

suffices, if the claim of injury is “redressable, at least in part,

by a return of the property.” United States v. 7725 Unity Ave.

N., 294 F.3d 954, 957 (8th Cir. 2002).

10

SunRise claims ownership over the money it transferred

to Core’s accounts in response to Emor’s fraudulent

statements. SunRise further claims that had the government

not seized the property and obtained a preliminary order of

forfeiture, SunRise would have obtained its property back,

either as the prior owner and crime victim with a superior

interest or under Core’s assignment of rights. If SunRise

could have obtained the property back from Core, SunRise

continues to suffer injury because of the forfeiture order. See

Oregon, 671 F.3d at 491 (declining to adopt government’s

argument that “a petitioner with less than legal title

challenging the forfeiture . . . could never have standing, even

if its interest is greater than that forfeited by the defendant to

the United States”); United States v. Campos, 859 F.2d 1233,

1237–38 (6th Cir. 1988) (noting the criminal forfeiture statute

“goes beyond giving only a party with a secured interest an

opportunity to be heard”). Thus, because the seizure of

property without due process is the quintessential injury, it is

sufficient, for constitutional purposes, that SunRise alleged its

property was taken by the government through forfeiture; it

would have reacquired its property had the property not been

forfeited to the government; it was excluded from the

forfeiture proceedings; and its injury is redressable through an

amendment of the forfeiture order. See Lujan, 504 U.S. at

560–61 (requiring injury, causation, and redressability in

order to establish constitutional standing).

C

We next turn to statutory standing. Under 21 U.S.C. §

853(n)(2), any third party, “other than the defendant,” may

petition for an ancillary proceeding. The district court held

that SunRise was Emor’s alter ego; and hence, SunRise

lacked standing because it was not someone “other than the

defendant.” SunRise claims the court was wrong to dismiss its

11

petition based on an alter ego finding the court made at a

hearing in which it was not allowed to participate. We agree.

To begin with, the Supreme Court has said that the term

“statutory standing” is a bit “misleading.” Lexmark Int’l, Inc.

v. Static Control Components, Inc., 134 S. Ct. 1377, 1387 n.4

(2014). Statutory standing is not really about standing at all,

in the sense that it limits a “court’s statutory or constitutional

power to adjudicate the case.” Id. (emphasis in original).

Instead, statutory standing is nothing more than an inquiry

into whether the statute at issue conferred a “cause of action”

encompassing “a particular plaintiff’s claim.” Id. at 1387; see

also Natural Res. Def. Council v. EPA, 755 F.3d 1010, 1018

(D.C. Cir. 2014). In other words, statutory standing “is itself a

merits issue.” Oregon, 671 F.3d at 490 n.6.

The focus on whether SunRise pled a valid cause of

action substantially changes the inquiry. A district court

deciding a motion to dismiss on jurisdictional grounds, such

as standing, may consider evidence outside the complaint. See

Coal. for Underground Expansion v. Mineta, 333 F.3d 193,

198 (D.C. Cir. 2003) (citing FED. R. CIV. P. 12(b)(1)). But

when a court decides whether a petitioner stated a valid claim

for relief, a court must treat the complaint’s factual allegations

as true and may not use factual findings and legal conclusions

drawn from outside the pleadings. See Holy Land Found. for

Relief & Dev. v. Ashcroft, 333 F.3d 156, 165 (D.C. Cir. 2003)

(citing FED. R. CIV. P. 12(b)(6)). The Federal Rules of

Criminal Procedure have largely adopted this pleadings-only

rule for third-party ancillary proceedings. See FED. R. CRIM.

P. 32.2(c)(1)(A) (in deciding a motion to dismiss a third-party

12

criminal forfeiture petition, “the facts set forth in the petition

are assumed to be true”). 1

By requiring courts to stick to the pleadings when

determining whether a petitioner has failed to state a valid

claim for relief, the pleadings-only rule fortifies the due

process concerns associated with stripping third parties of

property rights based on proceedings in which they had no

prior opportunity to participate. See Parklane Hosiery Co. v.

Shore, 439 U.S. 322, 326 n.7 (1979) (“It is a violation of due

process for a judgment to be binding on a litigant who was not

a party or a privy and therefore has never had an opportunity

to be heard.”); United States v. Reckmeyer, 836 F.2d 200, 208

(4th Cir. 1987) (“Congress intended, through . . . [the criminal

forfeiture statutes], to provide a means by which third persons

who raise challenges to the validity of the forfeiture order

could have their claims adjudicated.”). Thus, to the extent the

district court relied on an alter ego finding drawn from outside

the petition and made during a proceeding in which SunRise

could not represent its own interests, the court erred.

As to the government’s claim that SunRise failed to plead

sufficient facts rebutting the district court’s alter ego finding,

we disagree. The statutory text requires a third party to plead

only a “legal interest” in the forfeited property, and then set

forth the “nature and extent” of its interest in the property, the

“time and circumstances” when petitioner acquired that

interest, any supporting facts, and the requested relief. 21

U.S.C. § 853(n)(2), (n)(3). There is no textual anchor forcing

third parties to allege facts rebutting a court’s findings made

1

The criminal forfeiture statute prescribes when a court can

consider “relevant portions of the record of the [underlying]

criminal case” in deciding whether to amend a preliminary

forfeiture order, and that is “[a]t the hearing.” 21 U.S.C. §

853(n)(5).

13

at a proceeding in which the third party did not participate.

And even assuming that SunRise was required to plead it was

someone “other than the defendant,” 21 U.S.C. § 853(n)(2), it

did so. In its petition, SunRise stated that Emor never had an

“ownership interest” in SunRise. J.A. 287.

III

SunRise must state a valid claim of relief in order to

obtain a hearing. SunRise stated such a claim when it alleged,

“the Forfeited Property at all times remained the property of

SunRise Academy.” J.A. 285.

A

A third-party petitioner seeking relief from a preliminary

order of criminal forfeiture must satisfy one of two

conditions. A petitioner must either show a legal interest in

the forfeitable property vested in petitioner rather than the

defendant or show its interest was superior to the criminal

defendant’s at “the time of the commission of the acts which

gave rise to the forfeiture.” 21 U.S.C. § 853(n)(6)(A). If the

petitioner’s interest arose after the crime, the petitioner must

show it was a “bona fide purchaser for value” of the property,

who was “reasonably without cause to believe that the

property was subject to forfeiture” at the time of purchase. Id.

§ 853(n)(6)(B). The vesting and superior interest clause is

most relevant here.

In its petition, SunRise alleged an embezzlement theory,

claiming the “Forfeited Property at all times remained the

property of SunRise Academy,” J.A. 285, and that “Mr.

Emor’s embezzlement from SunRise occurred at the time of

each transfer from SunRise to Core,” J.A. 289. In its

opposition to the government’s motion to dismiss, SunRise

14

again referred to Emor’s “embezzle[ment]” of the $2 million

dollars and claimed SunRise owned the funds transferred to

Core at the time of “the alleged illegal taking by Mr. Emor . .

. .” Petitioner SunRise Academy’s Memorandum of Points

and Authorities in Opposition to Government’s Motion to

Dismiss at 3, 15-16, United States v. Emor, No. 10-CR-298-

PLF (D.D.C. Oct. 10, 2012), ECF No. 122 (emphasis added).

Although the embezzlement theory was not well developed,

SunRise did enough to preserve the claim for our review.

SunRise claimed Emor stole the funds. Under District of

Columbia law, theft covers not merely larceny, but “larceny

by trick, larceny by trust, embezzlement, and false pretenses.”

D.C. CODE § 22-3211(a) (emphasis added). So if SunRise

proves Emor stole or embezzled the funds SunRise sent to

Core for the purposes of building a coffee shop, SunRise

could establish possession of legal title or a superior legal

interest at “the time of the commission of the acts which gave

rise to the forfeiture.” 21 U.S.C. § 853(n)(6)(A). That is so

because, under District of Columbia law, embezzlement is a

form of theft in which the defendant deprives the victim of the

possession of, but not title to, property. See Great Am. Indem.

Co. v. Yoder, 131 A.2d 401, 403 (D.C. 1957) (where one

transfers possession of property to another who converts it to

his own use, the taking is a larceny); see also GEORGE G.

BOGERT, ET AL., BOGERT’S TRUSTS AND TRUSTEES § 476

(Thomsen-Reuters rev. 3d ed. 2015) (“A thief or an embezzler

has no title to the stolen property and thus, if the stolen

property is found still in his or her hands, the property may be

recovered by the rightful possessor.”).

Congress designed criminal forfeiture to punish criminal

defendants, not crime victims, and clearly did not contemplate

section 853(c) being used to defeat a victim’s property

interest. To put it another way, the vesting statute targets the

15

perpetrator’s interests downstream from the crime, not the

upstream interests of the victim. Thus, whether a third party

petitioner can claim continuous title or superior interest

should make little practical difference in circumstances such

as these. An example helps to illustrate how seemingly

disparate characterizations ought to lead to congruent results.

Say an employee convinced the Metropolitan Museum of Art

to take part in an art transfer with another museum. But

instead of shipping the painting to the other museum, the

employee ships it to his home for his personal use,

committing mail fraud in the process. If the act is labeled a

fraud, the Museum’s vested interest prior to the fraud should

mean it retains a superior interest sufficient to defeat

forfeiture. Arguably, though, a fraud victim could be

relegated to the ranks of general creditors and, lacking the

ability to claim a constructive trust, have a more difficult time

regaining its property. See BCCI Holdings, 46 F.3d at 1191–

92. In contrast, if the act is characterized as larceny by trick or

embezzlement, the Museum can argue its title was never

relinquished.

If SunRise can prove embezzlement upon remand, then

SunRise at all times possessed vested legal title or a superior

legal interest over the money and Emor did not, which means

the government never had a valid legal interest. See 21 U.S.C.

§ 853(n)(6)(A) (stating a petitioner may seek an amendment

of forfeiture, if a petitioner possessed title that “vested in the

petitioner rather than the defendant”). Suffice it to say,

SunRise may be able to establish a vested legal interest in the

$2 million dollars, thus stating a valid claim. 2

2

Because SunRise could not claim title to or possession of the

Lexus at the time of the wire transfer from SunRise to Core,

SunRise could only have had a superior interest in the Lexus at the

time of the acts giving rise to forfeiture through the imposition of a

constructive trust. But, as we explain below, this Court does not

16

B

In an effort to give the district court some guidance upon

remand, we highlight some potential issues that could arise.

Normally, a purported victim of crime would never need to

claim a vested or superior interest to obtain its money back

from the perpetrator. In many cases, a criminal defendant

pleads guilty to defrauding an identifiable victim. At

sentencing, the victim seeks restitution, see 18 U.S.C. §

3663A(c)(1)(A)(ii), and if restitution is ordered and the

government has seized assets belonging to the crime victim, it

often returns them. Similarly, the U.S. Attorney’s Office

would usually recommend restoration of forfeited assets to a

victim who is named in the restitution order. Status Hearing at

13, United States v. Emor, No. 10-CR-298-PLF (D.D.C. Aug.

2, 2011), ECF No. 50 (“Status Hearing”).

This is, however, not a typical third party case. The

government initially charged Emor with a scheme to defraud

the District of Columbia and SunRise. The district court

dismissed—with prejudice—the counts alleging a scheme

whereby Emor, through SunRise, defrauded the District. But

when the government offered Emor a guilty plea to a single

count of taking money from “SunRise’s bank accounts,” it

failed to identify a victim. 3 At Emor’s change of plea hearing,

recognize the constructive trust doctrine in federal criminal

forfeiture proceedings. See infra, at 21.

3

The Statement of Offense accompanying Emor’s guilty plea

claims Emor fraudulently obtained money from SunRise’s bank

accounts, not from the District. See J.A. 71. ¶ 7 (“A goal of the

scheme and artifice was for defendant Emor to fraudulently obtain

money, from SunRise’s bank accounts, for his own use and benefit .

. . .”) (emphasis added); J.A. 71 ¶ 8 (“It was part of the scheme and

artifice that defendant Emor, through various misrepresentations

17

the district court asked how it could “take a plea” without

knowing the identity of the victim, and the government

responded that the court could determine the identity of the

victim at sentencing. 4 Status Hearing, at 5. After Emor pled

guilty, the government took the position that, for restitution

and forfeiture purposes, the victim was the District of

Columbia. This meant SunRise could be denied restitution (it

was not the victim) and the government was free to argue

SunRise was Emor’s alter ego (SunRise was the defendant).

The government was candid about the reasons for its

unorthodox approach: it would permit the forfeiture

determination to be made in “a compressed evidentiary

hearing . . . with a preponderance standard and the hearsay

rules, obviously not applying,” see Status Hearing, at 5–6,

United States v. Emor, No. 10-CR-298-PLF (D.D.C. Aug. 3,

2011), ECF No. 59 (“Status Hearing II”), and without

agreement as to the nature of the offense.

and omissions of material facts, used the money obtained from

SunRise’s bank accounts in a manner unrelated to the education of

students with disabilities at SunRise.”) (emphasis added).

4

While establishing the precise identity of the victim(s) of the fraud

is not a required element of wire fraud, as a practical matter it is

difficult to conceive how the government could prove a violation of

a statute intended to punish those who deprive others of their

property, without identifying in some manner who those “others”

were. See Pasquantino v. United States, 544 U.S. 349, 355 (2005)

(holding that an element of wire fraud includes that the object of the

fraudulent scheme be money or property “in the victim’s hands”);

United States v. Madeoy, 912 F.2d 1486, 1492 (D.C. Cir. 1990)

(“We reject the appellants’ contention that the indictment did not

charge a scheme or artifice to defraud a victim of property.”)

(emphasis added).

18

Fraudulent schemes are not fungible. They come in many

forms and courts must consider the nature of the scheme to

determine how to connect the dots—who was defrauded and

how—and the amount of harm caused or intended. See United

States v. Munoz, 430 F.3d 1357, 1370 (11th Cir. 2005)

(“Fraudulent schemes, however, comes in various forms, and

we must consider the nature of the scheme in determining

what method is to be used to calculate the harm caused or

intended”). Even when guilt is established by plea rather than

a jury trial, the factual basis underlying the plea plays an

important role in assuring a knowing, intelligent, and

voluntary plea and resolving questions about restitution and

forfeiture. See United States v. Gonzalez, 647 F.3d 41, 65–66

(2d Cir. 2011). Here, when the district court suggested the

superseding information was “open to interpretation,” defense

counsel disputed this interpretation, insisting everyone was

“operating under the assumption that this is stealing from

SunRise,” and SunRise “was the victim.” Status Hearing, at

20, 22, 23. Both the court and defense counsel acknowledged

the parties would need to be on the same page “as to what the

thrust of the charge is” before Mr. Emor could enter a

“knowing, intelligent, and voluntary plea.” Id. at 23.

District courts must determine the crime before a

defendant pleads guilty and is sentenced. The government’s

strategic determination not to identify the victim in the plea—

arguing that the court could determine the victim at or after

the defendant’s sentence—has logical consequences.

Contradictory factual determinations could possibly sever the

nexus between the criminal conviction and the forfeiture. See

21 U.S.C. § 853(a); FED. R. CRIM. P. 32.2(b)(1)(A) (stating

there must be a nexus “between the property and the offense”

in order for property to be forfeitable). On remand, the district

court must ensure that its findings of fact and conclusions of

law do not contradict the factual and liability admissions

19

within the Statement of Offense. By the same token, the

government may not use the forfeiture proceeding to try and

establish additional facts—including the identity of the fraud

victim—that would contradict the factual basis for Emor’s

plea or alter the scope of legal liability to which he pled in the

Statement of Offense. See Status Hearing II, at 5–6.

IV

Several of SunRise’s claims fail as a matter of law, and

the district court need not consider them on remand.

A

SunRise claims it possessed “documents evidencing” its

ownership of Core, “through the members it appointed, who

hold their membership interest for the benefit and on behalf of

Sunrise” J.A. 289. As the district court noted, “[w]hat

SunRise means by this is not clear.” J.A. 306–07. What is

apparent is that SunRise failed to provide any legal or factual

support of its ownership claim. Cf. Ashcroft v. Iqbal, 556 U.S.

662, 678 (2009). The district court correctly found SunRise

failed to state a valid claim of ownership over Core.

B

SunRise further contends it possesses a legal interest

because Core assigned its rights to SunRise and SunRise was

a bona fide purchaser. Neither of these claims withstands

scrutiny.

Under the criminal forfeiture statute’s relation back

provision, these theories fail because title to forfeited property

vested in the government upon commission of the criminal act

giving rise to forfeiture. 21 U.S.C. § 853(c). Emor’s fraud

20

occurred at the very latest when SunRise wired the money to

Core in 2010, and thus well before Core’s alleged assignment

to SunRise in May 2012. Core could not have taken a

cognizable interest in the property because its interest vested

at the same time as the government’s interest. See 21 U.S.C. §

853(c). So Core had no right to seek return of its property.

Consequently, as to its assignment from Core, SunRise is

restricted to arguing that it is a bona fide purchaser for value

without reason to believe the property was subject to

forfeiture.

SunRise’s allegations were insufficient to meet that

burden. See Smith v. Wells Fargo Bank, 991 A.2d 20, 26

(D.C. 2010) (holding that a bona fide purchaser for value is

one who “acquired . . . interest in a property for valuable

consideration and without notice of any outstanding claims

which are held against the property by third parties”). Given

SunRise’s attempt to intervene in Emor’s criminal

proceedings in 2011 and the government’s seizure of the

property a year before, SunRise had sufficient cause to

believe the property was subject to forfeiture when Core

assigned its right to SunRise in 2012. Cf. United States v.

Huntington Nat’l. Bank, 682 F.3d 429, 436 (6th Cir. 2012)

(“[T]he whole purpose of 21 U.S.C. § 853(n)(6)(B) is to

protect innocent purchasers who acquire property without

notice of the government’s superior interest . . . in the

forfeited property.”) (emphasis added).

C

Finally, SunRise contends it possessed a constructive

trust in the forfeited property superior to the government’s

interest. SunRise acknowledges its constructive trust theory is

in considerable tension with BCCI Holdings, but it asks us to

limit BCCI Holdings to the RICO context.

21

While it is true BCCI Holdings was decided in the RICO

context and under a different statute, see 18 U.S.C. § 1963, it

is also true the two forfeiture statutes contain identical

language, and “it appears that no court has interpreted these

two provisions differently,” United States v. BCCI Holdings

(Luxembourg) S.A., 956 F. Supp. 5, 9 n.4 (D.D.C. 1997).

BCCI Holdings is not limited solely to the RICO context. See

Clark v. Martinez, 543 U.S. 371, 378 (2005) (“To give these

same words a different meaning . . . would be to invent a

statute rather than interpret one.”).

SunRise did not specifically request that we overturn

BCCI Holdings. Such a strategy would have support. Every

circuit to consider the constructive trust question in the

context of criminal forfeiture has rejected the analysis in

BCCI Holdings. E.g., Willis Mgmt. (Vermont), Ltd. v. United

States, 652 F.3d 236, 244–45 (2d Cir. 2011); United States v.

Salti, 579 F.3d 656, 670 (6th Cir. 2009); United States v.

Shefton, 548 F.3d 1360, 1366 (11th Cir. 2008); see also Osin

v. Johnson, 243 F.2d 653 (D.C. Cir. 1957). However, since

we cannot overrule a prior panel’s decision, except via an

Irons footnote or en banc review, we leave this issue for

another day. See Oakey v. U.S. Airways Pilots Disability

Income Plan, 723 F.3d 227, 232 (D.C. Cir. 2013) cert. denied,

134 S. Ct. 1513 (2014).

IV

For the foregoing reasons, the district court’s judgment is

Affirmed in Part, Reversed in Part, and Remanded.

So ordered.

WILKINS, Circuit Judge, concurring: I join in the Court’s

result and much of its rationale. I agree that SunRise has

standing to petition as the alleged victim of Emor’s

embezzlement and that SunRise is not estopped from

demonstrating its “interest” in the forfeited property based on

findings of fact the District Court made before it was entitled

to intervene in the proceedings. I write separately due to my

concern that Section III.B. of the majority opinion may

engender confusion about the scope of wire fraud or criminal

forfeiture.

I agree with the majority that the government is not

required to establish the identity of a specific victim in order

to prove wire fraud, Maj. Op. at 17 n.4, as the nine circuits to

consider the question have uniformly held. See United States

v. Tum, 707 F.3d 68, 75-76 & n.6 (1st Cir. 2013) (citing cases

from the Fourth, Fifth, Seventh, Ninth and Eleventh circuits);

see also United States v. McAuliffe, 490 F.3d 526, 533 (6th

Cir. 2007); United States v. Trapilo, 103 F.3d 547, 552 (2d

Cir. 1997); United States v. Pelullo, 964 F.2d 193, 216 (3d

Cir. 1992). As we have held, wire fraud requires proof only

of 1) knowing and willful entry into a scheme to defraud and

2) use of an interstate wire communication in furtherance of

the scheme. See United States v. Tann, 532 F.3d 868, 872

(D.C. Cir. 2008). Consequently, I disagree with the

suggestions throughout the majority opinion that the

government needed to identify the victim of the wire fraud in

the charging documents, or that the District Court needed to

determine whether SunRise, the District of Columbia, or the

federal government was the victim of Emor’s fraud at the time

of the guilty plea.

Wire fraud comes in many shapes and sizes. One

paradigmatic iteration of the offense transpires when the

defendant diverts for personal use funds that a donor provided

to a nonprofit corporation for a specific purpose. In such

cases, the donor/grantor can be properly characterized as the

2

victim even though the defendant took the property directly

from the nonprofit. See, e.g., United States v. Treadwell, 760

F.2d 327, 335-37, 337 n.17 (D.C. Cir. 1985); Post v. United

States, 407 F.2d 319, 329 (D.C. Cir. 1968); United States v.

Kilpatrick, No. 10-20403, 2013 WL 4041866, at *18-19 (E.D.

Mich. Aug. 8, 2013). As the majority notes, the diversion of

funds could also be characterized as an embezzlement in

which the nonprofit organization – here SunRise – is the

victim. Maj. Op. at 14.

In this case, the Information and Statement of Offense

expressly noted that the District and federal governments

were SunRise’s sole sources of funds and that the funds were

provided exclusively as reimbursement for special education

services, and characterized Emor’s scheme as involving the

use of SunRise’s funds “in a manner unrelated to the

education of students with disabilities at

SunRise.” 1 Superseding Information at 1, 3, United States v.

Emor, No. 10-cr-298 (D.D.C. July 22, 2011), ECF No. 44;

J.A. 69, 71. Thus, slightly differing from the majority, Maj.

Op. at 18-19, my reading of the record is that the prosecution

and Emor agreed at the time of the guilty plea that the wire

fraud scheme involved illegally diverting funds restricted for

educational uses to Emor’s personal use; and the parties went

forward with the plea with the full understanding that, in

subsequent proceedings, the government would argue that the

victim of Emor’s fraudulent scheme was the District, while

Emor would argue that the victim was SunRise. Transcript of

Aug. 3, 2011 at 14-15, Emor (D.D.C. Aug. 3, 2011), ECF No.

59.

1

Echoing the Internal Revenue Code, SunRise’s articles of

incorporation provide that “[n]o part of the net earnings of the

corporation shall inure to the benefit of, or be distributable to,” its

officers. J.A. 183; 26 U.S.C. § 501(c)(3).

3

Indeed, the government had ample basis to have

questions about the role of SunRise in Emor’s scheme. When

the government subpoenaed SunRise’s documents related to

Core Ventures, SunRise produced only brief, incomplete

notes purportedly reflecting two Board of Directors meetings

to document its $2 million “loan.” J.A. 232, 237-38. After

the guilty plea, the evidence presented at the hearings

indicated that SunRise’s Board at relevant times consisted

solely of Emor, his college-age son, and a young SunRise

employee; that the Board neglected to meet at all during 2008;

that it completely failed to document major activities such as

the purported loan to Core Ventures; that it approved

hundreds of thousands of dollars in purchases of luxury

vehicles, housing, and gifts for Emor and his family members;

and that it approved a $500,000 bonus to Emor while he was

incarcerated for selling stolen computers. J.A. 214-44. Of

course, SunRise will have the opportunity to rebut or explain

this evidence on remand, and to show that SunRise was not

complicit in Emor’s diversion. Nonetheless, I think it unfair

to suggest that the government should have been certain that

SunRise was a victim at the time of the guilty plea based on a

reasonable assessment of the facts as they would have

appeared to the government at that time.

In sum, the District Court can sort out any remaining

disputed issues of fact and law on remand, including

SunRise’s ability to demonstrate its “legal interest” in the

forfeited property and whether it is someone “other than the

defendant.” 21 U.S.C. § 853(n)(2).